DELPHI 2015 Annual Report Download - page 97

Table of Contents
75
DELPHI AUTOMOTIVE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
General and basis of presentation—“Delphi,” the “Company,” “we,” “us” and “our” refer to Delphi Automotive PLC, a
public limited company which was formed under the laws of Jersey on May 19, 2011, together with its subsidiaries, including
Delphi Automotive LLP, a limited liability partnership incorporated under the laws of England and Wales which was formed on
August 19, 2009 for the purpose of acquiring certain assets of the former Delphi Corporation, and became a subsidiary of
Delphi Automotive PLC in connection with the completion of the Company’s initial public offering on November 22, 2011.
The former Delphi Corporation (now known as DPH Holdings Corp. (“DPHH”)) and, as the context may require, its
subsidiaries and affiliates, are also referred to herein as “Old Delphi.” The consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Nature of operations—Delphi is a leading global vehicle components manufacturer and provides electrical and
electronic, powertrain and safety technology solutions to the global automotive and commercial vehicle markets. Delphi is one
of the largest vehicle component manufacturers, and its customers include all 25 of the largest automotive original equipment
manufacturers (“OEMs”) in the world. Delphi operates 126 major manufacturing facilities and 14 major technical centers
utilizing a regional service model that enables the Company to efficiently and effectively serve its global customers from low
cost countries. Delphi has a presence in 44 countries and has over 19,000 scientists, engineers and technicians focused on
developing market relevant product solutions for its customers. In line with the long term growth in emerging markets, Delphi
has been increasing its focus on these markets, particularly in China, where the Company has a major manufacturing base and
strong customer relationships.
Corporate history—In October 2005, Old Delphi and certain of its United States (“U.S.”) subsidiaries filed voluntary
petitions for reorganization relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the
United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). Old Delphi's non-U.S.
subsidiaries, which were not included in the Chapter 11 Filings, continued their business operations without supervision from
the Bankruptcy Court and were not subject to the requirements of the Bankruptcy Code. On August 19, 2009, Delphi
Automotive LLP, a limited liability partnership organized under the laws of England and Wales, was formed for the purpose of
acquiring certain assets and subsidiaries of Old Delphi (“the Acquisition”), and on October 6, 2009 (the “Acquisition Date”)
Delphi Automotive LLP acquired the major portion of the business of Old Delphi and issued membership interests to a group of
investors consisting of lenders to Old Delphi, General Motors Company (“GM”) and the Pension Benefit Guaranty Corporation
(the “PBGC”).
On March 31, 2011, all of the outstanding Class A and Class C membership interests held by GM and the PBGC were
redeemed, respectively, for approximately $4.4 billion. The redemption transaction was funded by a $3.0 billion credit facility
entered into on March 31, 2011 (the “Credit Facility”) and existing cash. Refer to Note 11. Debt and Note 15. Shareholders'
Equity and Net Income Per Share for additional disclosures.
On May 19, 2011, Delphi Automotive PLC was formed as a Jersey public limited company, and had nominal assets, no
liabilities and had conducted no operations prior to its initial public offering. On November 22, 2011, in conjunction with the
completion of its initial public offering by the selling shareholders, all of the outstanding equity of Delphi Automotive LLP was
exchanged for ordinary shares of Delphi Automotive PLC. As a result, Delphi Automotive LLP became a wholly-owned
subsidiary of Delphi Automotive PLC. The transaction whereby Delphi Automotive LLP became a wholly-owned subsidiary of
Delphi Automotive PLC had no accounting effects.
2. SIGNIFICANT ACCOUNTING POLICIES
Consolidation—The consolidated financial statements include the accounts of Delphi and U.S. and non-U.S. subsidiaries
in which Delphi holds a controlling financial or management interest and variable interest entities of which Delphi has
determined that it is the primary beneficiary. Delphi’s share of the earnings or losses of non-controlled affiliates, over which
Delphi exercises significant influence (generally a 20% to 50% ownership interest), is included in the consolidated operating
results using the equity method of accounting. When Delphi does not have the ability to exercise significant influence
(generally when ownership interest is less than 20%), investments in non-consolidated affiliates are accounted for using
the cost method. All adjustments, consisting of only normal recurring items, which are necessary for a fair presentation, have
been included. All significant intercompany transactions and balances between consolidated Delphi businesses have been
eliminated in the accompanying financial statements. The Company monitors its investments in affiliates for indicators of
other-than-temporary declines in value on an ongoing basis. If the Company determines that such a decline has occurred, an
impairment loss is recorded, which is measured as the difference between carrying value and estimated fair value. Estimated
fair value is generally determined using an income approach based on discounted cash flows or negotiated transaction values.